E-commerce giant Amazon’s main India unit spent more than 20% of the revenues it earned on legal and professional expenses, underlining the regulatory complexity of the world’s most competitive online retail markets in the world.

Amazon Seller Services spent ₹1,145 crore on legal professional expenses for the year ended March 2018, 47% higher than the previous year, according to the firm’s filing with the Registrar of Companies (RoC), sourced from paper.vc.

The company continued to spend big on areas such as faster deliveries and marketing to compete with bigger rival Flipkart, now owned by US retailer Walmart.

The losses for Amazon Seller Services increased by 30% to ₹6,287 crore during the financial year while operating revenues grew by 57% to ₹4,928 crore, according to the RoC filing. Even with a continued increase in losses, Amazon saw faster growth in revenues at 54% to ₹5,018 crore in FY18 against 43% growth in the previous year.

The pace of increase in losses remained steady.

Legal experts ET spoke with said the 20% share of legal fees of revenues was high for a company with large revenues. As per industry sources, Amazon also considers charges for services from its entity Amazon Development Centre India (ADCI), which offers technology support, as part of this segment, and part of the costs are likely to have gone up due to the scaling up of this group company.

Flipkart’s legal expenses were much lesser than Amazon’s. The Indian e-commerce marketplace’s two main units — Flipkart Internet and Flipkart India — recorded combined legal bills to ₹230 crore for FY18, 12.4% more than the previous year, according to RoC filings made earlier this week.

Without commenting specifically on Amazon’s figures, Sanjay Khan Nagra, principal associate at Khaitan & Co, said legal charges have been generally increasing for companies. “The last year specifically saw several regulatory changes, and this may continue going forward. Increased M&A activity could also add to the legal charges,” he said.Amazon’s logistic costs, the biggest expense item, rose 20% to ₹2,957.7 crore in FY18. Advertising expenses for the company picked up after a dip in FY17, going up by 16% to Rs 2,109 crore. Amount spent on salaries increased by 35% to ₹748.5 crore. The company also saw royalty costs increase by nearly three times to ₹270 crore from ₹78 crore.

Revenues from Amazon Prime memberships increased significantly, as the company reported ‘unearned revenues’ rising to ₹75.8 crore from ₹27 crore, which mostly entails payments in advance for Prime memberships and advertising.

“The company continue to invest in establishing infrastructure, opening new fulfilment centres, and technology advancement due to which company loss increased to Rs 62,872 million,” Amazon said in its filings. “The company also continues to invest in launching new products and services for its customer and sellers. The company is confident on its future growth.”

Amazon has so far infused Rs 25,090 crore in its marketplace business in the country, while it has also made steady infusions in its payments, logistics, cloud services, and food retail arm.

While Amazon India and Flipkart together control 80-85% of the online retail market in India, the Seattle-based Jeff Bezos-controlled company continues to face an uphill battle to topple the local rival's leadership.

This was evident during the recent sale event last month. Flipkart clocked $1-1.1 billion in GMV (gross merchandise value) in its five days of its Big Billion Days, up from $660 million last year, according to estimates of industry experts.